China cut interest rates for the first time since 2008, steppingup efforts to combat a deepening economic slowdown as Europe'sworsening debt crisis threatens global growth.

The benchmark one-year lending rate will drop to 6.31 percentfrom 6.56 percent effective tomorrow, the People's Bank of Chinasaid on its website today. The one-year deposit rate will fall to3.25 percent from 3.5 percent. Banks can also offer a 20 percentdiscount to the benchmark lending rate, the PBOC said, wideningfrom a previous 10 percent.

European stocks and U.S. index futures extended gains as China'smove fanned optimism that policy makers around the world will domore to bolster growth. The announcement, two days before China isdue to report inflation, investment and output figures, may signalthat the economy is weaker than the government expected.